Market Updates 01 Jun11

Market Updates 01 Jun11

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Market Outlook »

 

Nifty must stay above the 5545 levels sustainably with volumes.

The coming session is likely to witness a resistance at the 5575 levels on advances above which the 5600 maybe seen. Support is likely at the 5545 levels below which the 5495 maybe tested. Follow up buying, if occurs, may pull indices somewhat higher. The Nifty (spot) must stay above the 5545 levels sustainably with volumes and open interest expansion to rally intraday. On the flip side, sustaining below the 5495 levels may trigger a fresh bout of declines.

 

Technical Calls »

Buy Cox & Kings 371.00 target 395

Buy JSW Steel 958.100 target 975

Buy A.B. Nuvo 884.00 target 900

More

 

Momentum Calls »

Buy S.Kumar Nation 65.20 target 70

Buy Jyoti Structure 86.00 target 95

Buy IGL 332.00 target 345

More

 

Investment » 
Time Technoplast 

TTL reported strong numbers on revenues as well as profitability front This is due to the innovative product strategy of the company and strategic acquisitions. Due to reasonable valuations and 13% upside potential from current levels we revise rating to Accumulate on TTL with revised DCF based pricetarget of Rs 71.We are positive on the medium to long term growth prospects of TTL

 

Investment » 
IVRCL 

Net profit growth was impacted by lower than expected execution as well as higher interest outgo.We reduce our estimates due to delays seen in order bookexecution and expect revenues to grow by 15% and profits to grow by 10% during FY12. q At current price of Rs 71, stock is trading at 10.9x P/E and 5.2x EV/EBITDA on FY12 estimates Post revising our estimates, we arrive at a revised price target of Rs 111 

 

Stock Watch

Cummins India 

We expect that company is likely to maintain dominant position in the domestic market in future. Recovery in capex cycle and infrastructure spending would have positive impact on company's earnings. Continued momentum in the exports demand would also aid tofree cash flow generation over next few years. q We maintain our 'BUY' recommendation on company's stock with a DCF based one year price target of Rs 840 (Rs 837 earlier).

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

 

 

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Market Updates 31 May11

Market Updates 31 May11

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Market Outlook »

 

Nifty is likely to test a level of 5225.

Technically, the domestic markets have made a temporary bottom at the 5329 levels as it is not only a swing support but coincides with a bullish trendline threshold on the weekly charts. For intraday momentum players, theNifty spot must remain above the weekly high of 5485 level to make a continuous higher highs and lows.In case of declines, the Nifty is likely to test a level of 5225 as long as the bears keep the Nifty below the 5375 levels.

 

Technical Calls »

Buy Aban Offshore 560.90 target 575

Buy Bajaj Finserv 488.00 target 500

Buy Coal India 388.25 target 400

More

 

Momentum Calls »

Buy V Guard 204.00 target 215

Buy J. K. Cement 114.10 target 125

Buy Indian Cement 84.00 target 90

More

 

Investment » 
Axis Bank 

Axis Bank has registered buoyant loan growth on a balanced portfolio skewed towards corporate advances than retail. Retail advances contributed 20% to the total loan portfolio. Thus, it has better scope for aggressively expanding across segments where it has a low presence.It is also spreading across geographies and targeting presence in more than 75% of India`s districts in the next five years. The bank`s 

 

Investment » 
Jyoti Structures 

For 4QFY2011, Jyoti Structures reported 32% yoy top-line growth to `722cr, which was higher by 2.3% from our expectation of `703cr. For FY2011, revenue grew by 18% yoy to `2,380cr (`2,016cr). EBITDA margin for the quarter came in at 11.6%, which was higher by 80bp from our estimates of 10.8%. Higher sales volume coupled with lower raw-material costs aided margin improvement, resulting into EBITDA growing by 18% 

 

Stock Watch

Orbit Corporation 

Orbit`s consolidated revenue for Q4FY2011 fell by 21% year on year (YoY) due to a) a reversal of Rs 430 million of revenue booked in Villa Orb Annex for M9FY2011 as it failed to cross the revenue recognition threshold limit of 25%, b) slower execution of projects due to commercial and regulatory issues and c) poor sales volume. However, on account of lower cost ofconstruction and other expenditure, margins expanded to 77.9% from 47.6% in Q4FY2010.. At the currentmarket price, the stock trades at 6.3x FY2012 estimated earnings

 

 

Stock of the Week

Arvind Ltd 

Arvind is engaged in the manufacture of textiles and branded segments. Operates in three segments, textiles which inlcude yarn,fabric and branded garments and others which include EPABX and rural automatic exchange systems, It services and construction business. With an equity base of Rs 254cr supported with huge reserves of Rs 1235cr. For FY11 it recorded net sales of Rs 2691cr with net profit of Rs 134cr. FY11 EPS is Rs 5.64. At cmp the stock is available at a forward multiple of just 14.

 

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

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Market Updates 28 May11

Market Updates 28 May11

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Market Outlook »

 

The market will stay sideways in the near-term.

Pace of rallies is faster than the pace of declines indicating a shift of sentiment. Accumulation pattern which are now becoming evident in the short term.Oversold technical indicators which are now exhibiting positive divergence.Weekly candlestick chart shows a ``Dragon Fly Doji`` which is a bullish reversal pattern. A confirmation to this pattern is awaited in the coming week.

 

Technical Calls »

Buy Amara Raja Batteries 213.45 target 225

Buy Engineers India 261.00 target 275

Buy Gitanjali Gems 277.00 target 285

 

Momentum Calls »

Buy CREW BOS 99.00 target 120

Buy Ramky Infra 266.00 target 275

Buy Cairn India 343.00 target 355

 

Investment » 
JK Tyre 

JKTIL is the market leader in the radial truck and bus segment (TBR). In line with that its capacity at Vikrant has been commissioned from May 2011. Radialdemand continues to be on the upswing with TBR segmentradial penetration reaching 18%.. JKTIL has capex plans of Rs 11.3 billion in FY12E of which Rs 3billion has been spent till now.With moderate growth (8-10%) in TBR segment and higher growth in PV 

 

Investment » 
Tata Power 

We value the company at a P/E multiple of 17x FY12E EPS of Rs 91.1 and arrive at target price of Rs 1,550, which is arevision from our earlier target price of Rs 1,630. We reiterate a Buy rating on TPC`s share with an upside potential of 29% based on company`s strong presence across the value chain, established fuel linkage, huge expansion plans and good operating track record.At the current market price

 

Stock Watch

Elecon Engineering 

EEC`s order backlog has been declining post hitting the peak of Rs 18.12 billion in 3QFY2009. At the end of March 2011, the order backlog stood at Rs 13.84billion. It believes EEC`s current order book of Rs 15.77 billion or 1.2x FY2011 consolidated revenue offers good revenue visibility. It believes EEC is well placed to seize the upcoming opportunities in the power sector due its strong order book, which renders high revenue visibility. It has revised its earnings estimates to factor in the impact of the acquisition. It estimates sales to register a 23% CAGR to Rs 19.54billion over FY2011-13. The bottom line is likely to move in tandem with a 22% CAGR over the period. At current levels, the stock is trading at attractive valuations of 5.8x FY2013E earnings

 

Stock of the Week

Arvind Ltd 

Arvind is engaged in the manufacture of textiles and branded segments. Operates in three segments, textiles which inlcude yarn,fabric and branded garments and others which include EPABX and rural automatic exchange systems, It services and construction business. With an equity base of Rs 254cr supported with huge reserves of Rs 1235cr. For FY11 it recorded net sales of Rs 2691cr with net profit of Rs 134cr. FY11 EPS is Rs 5.64. At cmp the stock is available at a forward multiple of just 14.

 

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

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Market Updates 27 May11

Market Updates 27 May11

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Market Outlook »

 

Nifty must stay above 5370 with volumes and open interest.

The coming session is likely to witness a resistance at the 5395 levels on advances. Support is likely at the 5300 levels below which the 5285 maybe seen.The Nifty must stay above the 5370 levels sustainably with volumes and open interest expansion On the flip side, sustaining below the 5350 levels may trigger a fresh bout of declines.

 

Technical Calls »

Buy Cairn India 338.00 target 350

Buy Polaris 183.00 target 190

Buy Shivvani Oil 251.00 target 260

More

 

Momentum Calls »

Buy Guj. Alkalis 140.00 target 150

Buy Orchid Chemical 272.00 target 285

Buy Hanung Toys 164.35 target 175

More

 

Investment »

HSIL 

HSIL is setting up a Greenfield sanitaryware facility atGujarat with a capacity of 1.2 mn pieces, operational in Q3FY13. Company is also expanding capacity at its existing sanitaryware plants by 1 mn pieces. The 

 

Investment »

DLF 

DLF maintained steady execution momentum over FY11. Total delivery in 4QFY11 was 3.4msf v/s 1msf in 3QFY11. The company expects to deliver over 12msf of projects in Gurgaon, Kolkata and Channai in FY12 and 

 

Corporate Report » 
PFC 

We** lower loan CAGR; margin to be stable. *Delay in power projects due to environmental clearance and supply-linkage issues, and higher interest rates is likely to result in slower loan offtake by power companies. We reduce our FY11-13e loan CAGR to 22% from 25%. High capital base due to FPO, ECB, issuance of tax-free infra bonds and repricing of loans worth `81bn vs. liabilities of `89bn in FY12 are likely to 

 

Analyst Corner » 
Residential 

We expect a challenging six months with low volumes followed by a 15-20% correction in prices. We are unlikely to see a steeper correction, which the stocks are already factoring in, as the economy continues to do well while developers in general are in better financial health unlike in 2008-09. A 15% correction in Mumbai will bring the rise in property prices of the last six years in line with income growth

 

Stock Watch

JK Lakshmi Cements 

For 4QFY2011, JK Lakshmi Cements registered a 6.2% yoy decline in its top line to Rs 4.14 billion primarily due to a 5% decline in dispatches to 1.33mn tonnes. Cement realisations also declined by 1.3% yoy to Rs 3,112 per tonne. However, on a sequential basis, realisations were higher by 7.6%. On the operating front, the company`s profit declined by 456bp yoy to 18.6% due to lower realisations and higher power, fuel and freight costs. On the bottom-line front, the company`s net profit fell by 54.4% yoy to Rs 320 million. We maintain our Buy recommendation on the stock with a target price of Rs 66.

 

Stock of the Week

IRB Infra 

IRB has guided for a 15-20% growth in consolidated revenues. E&C margin for FY12E to remain robust at 22-24% (our erstwhile estimates were 21.2%).4QFY11 APAT (+ 76%yoy) above exp. - Better than provisionalAPAT. APAT at Rs 1.58 billion adjusting for Rs 550 million one off mark to market loss & reversal of tax benefit allowed. Toll collection on Tumkur to start in June 11, on Kolhapur project by July 11. Goa project stuck on land acquisition issues. Project unlikely to see execution in FY12E.

 

 

Calls Reviews

Pantaloon given at 241 Achieved 260 

Coromandel given at 315 Achieved 327 

Canbank given at 523 Achieved 531 

TCS given at 1152 Achieved 1182 

Wockhardt given at 346 Achieved 372 

Bhel given at 2068 Achieved 2108 

Hercules Hoist given at 227 Achieved 239 

HDFC given at 630 Achieved 650 

Shriram Trans given at 639 Achieved 685 

Emami given at 407 Achieved 434 

Shalimar Paints given at 407 Achieved 475 

Bajaj Finserv given at 495 Achieved 528 

Muthoot given at 133 Achieved 138 

Adani given at 626 Achieved 662 

IRB given at 161 Achieved 167 

Tata Motors given at 1208 Achieved 1234 

Vikas Global given at 81 Achieved 84 

Ranbaxy given at 478 Achieved 497 

ShreeGanesh given at 252 Achieved 278 

 

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

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